The California Housing Crisis

The backlash comes as California’s lack of housing supply is becoming a crisis. A postwar building boom gave birth to a labyrinth of freeways and sprawling suburbs, and between 1980 and 2010, coastal metro areas in California added new housing units at about half the rate of the typical U.S. metro area.

california housing crisisOur golden state of California seems to be spawning real estate that soon might be worth no less than gold as an extreme shortage of supply is driving up prices but not enough new construction. A recent report from The Wall Street Journal says, “In 1970, California home prices were about 30% higher than the U.S. median; today, California is more than 2.5 times pricier.” Evidently, in an attempt to keep prices more in-line with the rest of the country at the time, “California built an estimated 90,000 fewer units per year than were necessary,” according to the state legislative analyst’s office. So today, a handful of California advocates are taking what The Wall Street Journal calls, “a once unthinkable approach to development in their backyards: They are trying to force cities to allow more of it.” The movement is about sacrificing preserved space to help solve the California housing crisis.

Advocates of the housing drive are being met with resistance from residents opposing development plans and are using environmental regulations “intended to preserve California’s picturesque coastline and hillsides” as a means to challenge the projects, as reported by The Wall Street Journal, further explaining, “If a review finds adverse impacts on parking, traffic, noise, or air quality, elected officials can’t approve it until they have addressed opponents’ concerns.” This can cause a severe project delay or an all-out standstill, eventually forcing developers to pull the plug altogether. Lawyers such as Marco Gonzalez of Southern California and environmentalists like Mark Vallianatos of Los Angeles, once on the opposing side of housing developments, have now joined forces and switched slants by “fighting cities and neighborhood groups in Southern California that fail to provide enough housing units,” as reported by journalist Chris Kirkham. Sure enough, the California crunch is wedging its way in and widening the gap between residents on conflicting ends of the crisis.

I have over 10 years of experience in the Southern California home lending market. Please feel free to reach out to me – I would be happy to discuss the condition of the housing market as well as go over your loan options together.

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